Monday, October 16, 2006

AIP Formula

In response to Will Dixon's comment as to who and what Amercian International Pictures was, I present you with this concise history of the company and its principals Samuel Z. Arkoff and James H. Nicholson.

Please note the parallels between the movie industry in the 1950's and today. What AIP did was apply solid business marketing principles to the business and exploit the teenage audience niche. In the process they become one of the most successful independent production and distribution companies in the industry - ever.

8 comments:

Thanks Bill - my bad...didn't make the connection between AIP and American International Pictures (which I have heard of).

But can you draw an exact correlation? I mean, even with inflation factored in, 16 mil a picture seems like a lot more dough per movie than the AIP pix. But I guess you're talking more about the model.

One thing I'd be curious about is the above the line costs and fees - one thing about the AIP era was that most of the money went into the movie. These days? Not so much...

Silver and Michael Bay and others are using the same principles used by Arkoff et al, to create a lot of movies with affordable talent. You'll note they are concentrating on genre product then expanding from there.

We have studios these days trying to compete with TV, videogames, the web, etc... They've tried to do so with huge blockbusters - many of which suck. Theatrical attendance is down, ticket prices are up. Studios are trotting out 3-D, and other visual spice to try and drive people back to theaters.

It didn't work in the fifties with Vista-scope and it's not really working now.

AIP (and now Silver and Bay) are going in the opposite direction - making lots of movies to regularly feed a machine. Movies that feature concept over talent attachments.

The average Hollywood movie is $50M if not more and doesn't make its money back on the theatrical release. THE TEXAS CHAINSAW MASSACRE REMAKE was made for $9M and grossed about $100M.

The new TCM: The Beginning was made for $19M and grossed $16M its first weekend. It's still in the top ten.

And like AIP, Silver & co. are financing these movies outside Hollywood. AIP used to do it via the indie theater chains who would pre-book a picture and pay upfront.

These are the same market conditions and the same independent producer response:

-Spotting niches and making product to control that niche;- Seeking financing outside the studios;- Creating a lot of content in a relatively short amount of time to generate a library which can be leveraged financially.

Looking at Silver's Dark Castle banner - none of their movies have big budget names. They are mostly TV names (Chad Michael Murray, Elisha Cuthbert) or celebrities (Paris Hilton). Not an "eight figure" star in the bunch. That plus the fact they shoot in your neck of the woods [THIRTEEN GHOSTS].

And no big exec producer fees off the top, as far as you know? I've just been involved in a lot of those supposed medium budget productions that then had huge exec/company fees off top making them 'really' low budget when it came to actually making them.

Unlike many of his and Bay's productions hired out for the studio, Silver has something he didn't have before - ownership and copyright. Well, he had it before, but not to this degree.

Will he do really well on his fee per picture? Yeah, but it won't be outrageous. He's making these films relatively cheaply (for a studio producer). Bay's budgets are capped at $25M. The payoff comes on the backend - the ownership of the copyright.

The thematic point is that things are shifting away from the studio as the end-all be-all in terms of moviemaking. It's moving toward the producers who set up these output deals. It's moving away from these "swing for the fences" blockbusters that strike out toward lots and lots of "base hits." It's the AIP formula.

It's the same formula that Lionsgate uses as well. They measure risk and dominate niches. They make sure they don't lose, and if they do they have financial controls in place to make sure they don't lose much.